Digital switch real dilemma for independent theaters

SYCAMORE – Daryl Hopper thinks people probably don’t understand how close the community came to losing downtown Sycamore’s historic movie theater.

Hopper, who has owned Sycamore’s State Street Theatre with her husband Ken since 2000, recently updated the theater’s equipment from film to digital, which she had to do to continue showing new movies.

As of Sept. 30, first-run movies are much harder to obtain on 35mm film and might only be available in the format until 2014.

“Digital was not supposed to come into true effect until 2018, so we thought we had some time,” Hopper said. “... Over the last year, I knew we were either going to have to close or go digital.”

The change in the film industry has posed a problem for theaters across the country, especially small, independent movie houses like Sycamore’s, which was built in 1925 and now has three screens.

The Hoppers had to secure a large loan to purchase the digital projection equipment, which costs $65,000 a screen, no matter the size of the theater.

“That’s why it’s so cost-prohibitive for so many of the theaters,” Hopper said. “It’s been the worst 10 years in the movie industry, but they want us to put out the biggest amount of money.”

Laura Vazquez, Northern Illinois University communications professor, said the switch to digital has been a long time coming, but most theaters have put off improvements with the current state of the economy and smaller crowds.

The Hoppers began working on the loan in January. After getting approval from NB&T and the U.S. Small Business Administration, they recently received a loan for about $190,000 worth of equipment. It was installed at the end of September.

“Almost $200,000 worth of computer equipment is hard for banks to swallow, too,” she said. “It’s not bricks and mortar,”

Film companies are assisting theaters that make the investment. Hopper said distributors such as Paramount, Disney and other companies will pay theaters using digital equipment about $700 in virtual print fees for a first-run movie during the next six years.

The deadline for theaters to take part in receiving those fees was Sept. 30. That’s another reason why the change needed to happen so quickly, Hopper said.

Previously, films arrived on several reels, shipped in heavy packages, Hopper said. Now, a new movie is stored on a hard drive and comes in a small box.

After the film is downloaded onto a server, the movie can be shown on any of the theater’s three screens with the click of a mouse – no set up of reels required, she said. The old metal film reels that hang on the wall of the projection room are now just decoration.

Hopper said the family is excited about the change, “because most theaters our size are going out of business.”

In March, the theater hosted a symposium that brought together more than 50 independent theater owners from the Midwest, Hopper said. Representatives for digital projection and sound explained what the change would entail.

Hopper said Sycamore’s theater is the only one of that group that’s made the switch to digital.

“Everybody was excited about it, but none of them knew how to finance it,” she said.

The Egyptian Theatre in DeKalb shows classics and family films, not first-run movies, said executive director Alex Nerad, so they haven’t faced the same issue. But the theater also made the switch to digital a few years ago on a smaller scale, now using a digital projector to show movies.

“It’s very exciting to have a historic theater in our community that shows first-run films,” he said of the State Street Theatre.

A corporate representative with Carmike Cinemas, which owns Market Square 10 in DeKalb, could not be reached for comment.

Sycamore Mayor Ken Mundy said he appreciates the investment the Hoppers made in the community.

“Nobody’s looking to spend money they don’t have,” he said. “We are fortunate that these folks in business here are able to adjust, and this is a big adjustment here.”

Having worked in the film industry since 1974, Hopper became emotional talking about the change. The family took the old film equipment, still in good condition, to DeKalb Iron and Metal Co.

But, Hopper added, there are benefits to digital. Sound is much more precise, and they’ll never have to worry about scratches, dust or the film being out of frame.

“It really does look a lot nicer,” she said.

Vazquez said she fears more small theaters will be forced to examine whether they can afford to remain open.

As technology continues to advance, she said “somebody’s going to keep pushing the limits and squeezing the small-town cinema owner out of business.”